KPMG reports - Illinois (Chicago software tax); Kentucky (COGS); Oregon (refund opportunity); Virginia (related-party expenses) 

September 9: KPMG’s This Week in State Tax—produced weekly by KPMG’s State and Local Tax practice—focuses on recent state and local tax developments and features a series of short podcasts presented by KPMG tax professionals. Text of the podcasts is also available.

Today’s edition, for September 9, 2013, includes the following topics (listen to the podcasts; to read text, click on the links below).


  • Illinois - Chicago now tests the taxation of leases of computer software under a five-step process; accordingly, certain perpetual leases of software previously treated as sales are now subject to Chicago’s personal property lease transaction tax—a departure from the taxation of software by the State of Illinois.
  • Kentucky - The Department of Revenue specified that “costs of goods sold” (COGS) for purposes of computing the limited liability entity tax includes only direct labor and direct material sold.
  • Oregon - The Department of Revenue issued guidance concerning how taxpayers may obtain refunds of minimum corporation tax by using tax credits to reduce their liability.
  • Virginia - The Tax Commissioner addressed several issues related to the deductibility of certain types of intercompany expenses with respect to Virginia’s related-party expense disallowance statute.




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